Most people know of the Community Schemes Ombud Service (CSOS) and that levies must to paid to fund its operations. In this article I will address some of the issues that are causing confusion.
The CSOS Act and Regulations came into effect on 7 October 2016, and in terms of section 29(1)(b) of that Act, all community schemes must pay levies to the CSOS. The Regulations that detailed the levies came into effect 90 days after the Act, so the CSOS levies are payable from 7 January 2017.
The CSOS levies are not debts owed by individual owners to the CSOS. Even though the amounts of the levies, and waivers of, are calculated by reference to the contributions payable by individual owners, the total amount due by all owners in a community scheme is a debt payable by the scheme to the CSOS. Section 59(a) of the CSOS Act provides that every community scheme must pay the prescribed CSOS levies.
In terms of General CSOS Regulation 11(1) every community scheme must pay CSOS levies on a quarterly basis.
There is no provision in the CSOS Act or Regulations that requires the CSOS to issue schemes with invoices for levies. Schemes are legally obliged to remit levies to CSOS as soon as CSOS is in a position to accept payment. At this time CSOS does not have details of all community schemes. While its staff are trying to get as many community schemes as possible recorded on its database, this is an ongoing process.
In terms of General CSOS Regulation13 any community scheme which fails to pay a CSOS levy on due date is liable to pay interest at a rate prescribed by the National Credit Act, 2005. This is likely to be a rate of 22% per annum on the basis that the debt arises from an incidental credit agreement.
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